The World Bank has sanctioned a $2.25 billion loan for Nigeria, aimed at stabilizing the nation’s economy and bolstering support for impoverished communities. This announcement was made on Thursday, marking a crucial step in Nigeria’s economic recovery efforts.
Earlier this year, Nigeria’s Finance Minister, Wale Edun announced the country’s intent to secure up to $2.25 billion in loans from the World Bank, with approval expected by June. The approved funds will now provide essential backing for the government’s reform initiatives.
In May last year, President Bola Tinubu introduced some of the most significant economic reforms in decades. These included the elimination of a costly petrol subsidy and the devaluation of the Nigerian currency on two occasions to stimulate economic growth. While these measures were necessary, they led to increased inflation and a heightened cost of living crisis.
The International Monetary Fund (IMF) predicted that the cost of fuel subsidies could reach up to 3 percent of Nigeria’s GDP this year due to currency devaluation. Despite these predictions, labour unions have been urging President Tinubu to reverse the reforms to alleviate economic pressure on the populace.
The World Bank’s loan package includes $1.5 billion dedicated to supporting Nigeria’s reform programmes and an additional $750 million aimed at accelerating revenue mobilization. The World Bank commended Nigeria for embarking on essential reforms to correct economic imbalances and enhance fiscal stability. The institution noted, ‘Initial critical steps to restore macroeconomic stability, boost revenues, and create conditions for renewed growth and poverty reduction have been taken.’
The funds will assist Nigeria in increasing non-oil revenue and promoting fiscal sustainability, which are crucial for improving the delivery of public services. This financial aid is expected to significantly contribute to Nigeria’s efforts to stabilize its economy and mitigate the adverse effects of recent reforms on its citizens.
With this loan, Nigeria aims to continue its path towards economic recovery, ensuring better living standards and sustainable growth for its population.
